The Apple Watch is winning in the battle of fitness trackers

Consumers are ditching their fitness trackers for the added functionality of smartwatches. And as smartwatches become increasingly easy to use and affordable, they will capture an even greater share of the wearables market, driving down demand for fitness- and activity-tracking bands, like the Fitbit. The fitness-band category will make up 42% of total wearables shipments in 2020, down from an estimated 48% share this year, and a 53% share in 2014.

To win over nontech buffs, smartwatch makers are also offering models that cater to health and fitness enthusiasts. The Apple Watch Sport model, for example, has basic materials like an aluminum case with a rubberized band, similar to the material on popular fitness trackers like the Jawbone Up or Fitbit Force.

In a recent report, BI Intelligence takes a closer look at how smartwatches will siphon market share from fitness trackers in the wearables market, and how Apple's smartwatch might impact the market for luxury watches. We also forecast shipments for both Apple Watch and the broader luxury watch market over the next five years, and examine the pricing and design strategy behind the Apple Watch, the new retail distribution opportunities with this device, and the wider opportunity among tech-savvy consumers.

Here are some key points from the report:

• Potential smartwatch buyers are interested in notifications and health and fitness apps. Apple has the advantage among these buyers: three times as many people are interested in a smartwatch from Apple, over one running the Android platform, according to our BI Intelligence global online survey on smartwatch adoption and purchase intent.
• A significant 27% of respondents interested in the Apple Watch said they already wear a watch and that the added functionality of a connected watch appeals to them.
• Fitness bands have more limited functionality and will cater to a more niche, health-focused audience.
• Fitness bands are aiming to widen their reach by offering designer brand versions of their devices. For example, Nordstrom carries a Tory Burch-design version of a Fitbit fitness tracker for the more fashion-conscious consumer.
• By 2020, Apple Watch shipments will be equivalent to about two-fifths of the luxury-watch market. Assuming a lower-bound price of $350 for the luxury-watch category, and including Apple Watch in that category, traditional wristwatches would account for ~60% of total shipments in 2020, while Apple Watch would account for ~40%.

In full, the report:

• Looks at the market for fitness trackers, and examines how smartwatches will pose a threat to this device category.
• Forecasts the markets for wearables overall, smartwatches, and luxury wristwatches through 2020.
• Estimates Apple's tiered pricing strategy for its three Apple Watch models.
• Examines the opportunity for Apple Watch to resonate with consumers in the traditional luxury wristwatch market.
• Discusses the new retail distribution opportunities for Apple Watch through apparel and jewelry retailers, including department stores.
• Reviews proprietary consumer survey results that give insight into what consumers are looking for when choosing a smartwatch.

Interested in getting the full report? Here are two ways to access it:

1. Subscribe to an All-Access pass to BI Intelligence and gain immediate access to this report and over 100 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally.» Learn More Now
2. Purchase & download the full report from our research store.» Purchase & Download Now

---

PS. Did you know...

Our BI Intelligence INSIDER Newsletters are currently read by thousands of business professionals first thing every morning. Fortune 1000 companies, startups, digital agencies, investment firms, and media conglomerates rely on these newsletters to keep atop the key trends shaping their digital landscape - whether it is mobile, digital media, e-commerce, payments, or the Internet of Things.

Our subscribers consider the INSIDER Newsletters a "daily must-read industry snapshot" and "the edge needed to succeed personally and professionally" - just to pick a few highlights from our recent customer survey.

With our full money-back guarantee, we make it easy to find out for yourself how valuable the daily insights are for your business and career. Click this link to learn all about the INSIDER Newsletters today.